Seller’s Warranties

The Bigger Picture In Selling Your Business

What Do Seller’s Warranties Mean?

Seller’s warranties are legally binding and enforceable statements about a business offered for sale which the vendor confirms are true and correct. Warranties obligate the seller to bear any liabilities covered after the business purchase is completed. Warranties and what they cover are open to negotiation between the seller and the buyer. However, once included in the Sale and Purchase Agreement (SPA) and the sale completed, warranties, like all other provisions in the SPA, are irreversible. As such, great care needs to be taken by both the seller and the buyer in agreeing what is specified and guaranteed as warranties in SPA.

It is worth noting that the more favourable warranties the seller gives the more assured the buyer will be with the purchase as well as even generate a valuation premium for the business and how much he/she is willing to pay in the end to secure the purchase. The seller however needs to be circumspect and tread cautiously not to commit to unbearable potential liabilities – the stark realities of which will only dawn long after the completion, if they occur.

« Back to Glossary Index

Contact the Firmgains Team

Explore the options available to you, improve your chances of successful sale.

Send an Email

    By submitting this form you are agreeing for us to contact you about our services. Note that all data shared with us is private and will not be shared publicly or passed on to third parties without your written consent. View our privacy policy.

    looking to acquire?

    If you’re seeking a business to buy, then we can increase your deal flow.

    Articles & Insights


    head office

    We are based in the Centre of Reading. Two minutes from the train station and just south of the river. You can reach us at the office, by phone or email during working hours from Monday to Friday.
    Click here for directions


    Fourth Floor
    Reading Bridge House
    RG1 8PR

    main phone0333 050 8225